Little appetite for paid content, study finds

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New York--Paid online content will be a tough sale, according to a new Jupiter Media Metrix forecast released Monday.

The paid online content market will grow to only $5.8 billion by 2006 from $1.4 billion this year, Jupiter said. Jupiter predicts revenue from general content will reach $2.3 billion in 2006 (up from $700 million in 2001), while revenue from online games and digital music will be $1.8 billion and $1.7 billion, respectively. Revenue from games and music will be $260 million and $30 million, respectively, this year, Jupiter said. What’s more, the research company said there is fragmentation among content types and that no single category (such as audio/video, adult, and financial and business news) would be the obvious winner for paid models.

The survey results, released at Jupiter’s ninth annual Media Forum in New York, will be little comfort to publishers and Web portals hoping to offset lost Web advertising revenue by charging subscription fees for online content. Indeed, consumers are less likely now than 18 months ago to pay for content, said David Card, Jupiter VP-senior analyst.

“The mass market still largely shuns anything that smells like a subscription online,” Card said. He noted that attitudes toward paid content did not vary much among different demographic audiences.

Over 60% of survey respondents said they wouldn’t pay for online content. But 42% of survey respondents expect that over time people “will have to pay for content on the Internet,” the survey found. However, Card pointed out, these consumer attitudes toward paid content have worsened from August 2000, when 45% of respondents accepted the notion that people will eventually have to pay for online content.

Card did suggest that Internet service providers and media companies are well positioned to make some money from subscription models, provided they package content correctly, focusing on exclusivity and interactive features. Card also said the growing popularity of broadband connections--able to support high-quality audio and some video--gives media companies an opportunity to “reset consumer expectations.”

The March 2002 Jupiter Consumer Survey was based on the responses of 2,097 individuals who received an e-mail that linked them to a Web-based survey form.

--Ellis Booker

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